News

Cattle Outlook: Corn Futures Aiding US Feeder Cattle Futures

11 July 2016

Ron Plain

US - The US exported 219.1 million pounds of beef during May. That is 13.8 per cent more than a year ago and the most for any month since October 2014, write Ron Plain and Scott Brown, Ag Economics, MU.

Beef imports during May totalled 275.3 million pounds. That was down 9.9 per cent year-over-year. May beef imports equalled 13.6 per cent of production and exports equalled 10.8 per cent of US beef production.

During the first 5 months of 2016, beef imports were down 12.2 per cent with big declines in imports from Australia, New Zealand and Brazil. Beef exports during the first five months of the year were up 2.6 per cent with large increases in shipments to South Korea, Japan and Mexico.

January to May cattle imports from Canada were down 10.9 per cent and from Mexico down 10.4 per cent compared to a year earlier.

USDA weekly crop progress report said that 12 per cent of US pastures were in poor or very poor condition as of July 3. That is up 2 points from the week before and 3 points higher than a year ago.

Fed cattle sales volume was light last week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $120.38/cwt, down $2.10 from the previous week's average and down $31.05 from a year ago. The 5-area dressed steer price averaged $190.66/cwt, down $5.28 from the week before and down $49.61 from a year ago.

On Friday morning the choice boxed beef cutout value was $209.86/cwt, up $1.20 from the previous Friday, but down $29.17 from a year ago. The select carcass cutout on Friday morning was $196.97/cwt, up $3.39 from the previous week, but down $39.07 compared to last year. The choice-select spread, $12.89/cwt on Friday morning, remains high, but is down from record levels in June.

Because of Monday's holiday last week's cattle slaughter totalled only 513,000 head, down 14.6 per cent from the previous week and down 7.7 per cent from a year ago. The average steer dressed weight for the week ending on June 25 was 864 pounds, down 3 pounds from the week before, down 8 pounds from a year ago, and below the year-ago level for the eighth consecutive week.

Because of the Independence Day holiday on Monday, there was no feeder cattle auction at Oklahoma City last week. Feeder cattle prices at Missouri auctions last week were higher in light volume. Prices for medium and large frame #1 steers by weight group were: 400-450# $158.50-$189, 450-500# $154-$181.75, 500-550# $151-$183, 550-600# $147.50-$174.25, 600-650# $140-$172.50, 650-700# $137.50-$169, 700-750# $137-$164, 750-800# $138.75-$163.50, 800-900# $134.50-$149.35 and 900-1000# $126-$146.25/cwt.

The August live cattle futures contract settled at $112.22/cwt on Friday, down 75 cents for the week. October fed cattle settled at $112.32/cwt, down 95 cents from the previous Friday. The December contract ended the week at $113.75/cwt.

Corn futures were lower again last week, which helped feeder cattle futures. August feeder cattle futures ended the week at $143.45/cwt, up $1.00 from a week earlier. October feeder cattle closed the week up 92 cents at $141.47/cwt.